Back
SUPREME COURT OF INDIA
Arijit Pasayat : B.N.Kirpal : K.G.Balakrishnan
Sharma Transport Rep.By Shri.D.P.Sharma
Versus
Government Of A.P.
Case No. : 4998 of 2000
Date of Decision : 12/3/01
Advocates Appeared: Ahmed Irshad : Amareshwarii K. : Bhat K.N. : Bhatt K.N. : Chaudharyy B.K. : Gupta Jaideep : Hegde R.S. : Jain Prashant : Katiyar Anil : Kumar K.Ram : Prabhakar Guntur : Rao K.Subba : Ratnam T.V. : Sagar E.C.Vidya : Sagar S.U.K. : Salve Harish N. : Sampath A.T.M. : Sanghi G.L. : Setia S.R. : Sharma Somiran : Singh Niranjana : Singh P.P.
Held : By no stretch of imagination the letter dated 30th August, 1993 can be regarded as a law laying down the principles of taxes on vehicles. It cannot also be treated as a subordinate legislation deriving its power or force from the Act or any other law made by the Union. It has been fairly stated by learned Solicitor General that though reference has been made to the consent of the various State Governments, it cannot be treated to be a directive. It was only a request to the States to act in terms of the deliberations which took place at the meeting of the Transport Development Council. (Para 7)
Whatever has been stated above in the background of Article 73 is equally applicable to Articles 256 and 257 of the Constitution. There is no law specifying the principles of taxation on the subject matter of controversy so as to bring in application of either Article 256 or Article 257 of the Constitution. (Para 8)
Held consequently : There is no substance in the plea of the appellants that the letter of the Joint Secretary to the Government of India dated 30th August, 1993 was in the nature of a direction. (Para 9)
(ii) The Motor Vehicles (All India Permit for Tourist and Transport Operators) Rules, 1993-Rule 1(4)-Whether intended to curtail the power of the State to levy taxes in respect of vehicles? (No) (See Para 10)-Whether it has its source in Rule 84 of the Central Motor Vehicles Rules, 1989? (No) (See Para 11).
(iii) Promissory Estoppel-An order dated 1.7.1995 issued by the Transport, Roads & Buildings (Tr. II) Department giving concession to tourist coaches later withdrawn by a notification dt. 5.6.2000-Whether hit by promissory estoppel? (No) (See paras 12 to 24)-Case Law referred.
(iv) Constitution of India-Art. 301-Freedom of Trade, Commerce and Intercourse-Withdrawal of order of concession by a later notification-Whether violative of guarantee under Article 301? (No)-Whether notification dated 1.7.1995 supersedes the original notification issued under Section 3 of the Andhra Pradesh Motor Vehicles Taxation Act, 1983? (No)-Result-Appeals dismissed-Case law reviewed-High Courts order upheld.
Held : We may note here that though arguments were advanced in the background of Article 301 of the Constitution, as has been rightly submitted by the learned counsel for the State of Andhra Pradesh, there were no pleadings in this regard in the writ petitions, excepting some general statements about violation of Article 301. It has been fairly considered that Presidents assent as required has been obtained. Thus the case is not relatable to Article 301, but Article 304. With reference to clause (b) of the said Article, it is submitted that mere obtaining assent is not sufficient, and it has to be shown that the levy was in public interest. There was no averment in the petitions before the High Court in this regard. There was also no view expressed by the High Court on this issue, in the absence of any argument or plea before it. The question whether public interest was involved or not required a factual adjudication. Since there were no pleadings, the State did not have an opportunity to indicate its stand. Under the circumstances, we do not think it appropriate to consider that question for the first time in these appeals, particularly, when factual adjudication would be necessary. Coming to the plea relating to repeal of the Notification, it is to be noted that the Notification dated 1.7.1995 was issued in exercise of powers conferred under Section 9(1)(a) of the Taxation Act, while the impugned Notification was issued in exercise of powers conferred under Section 9(1)(6) of the said Act. It is to be noted that originally Notification was issued under Section 3 of the said Act and its operation has not been questioned. That being the position, there was no requirement to issue a fresh Notification to make the levy. Notification dated 1.7.1995, did not supersede the original Notification issued under Section 3 of the Taxation Act. In the result, the appeals are dismissed. (Paras 30, 31 & 32)
Arijit Pasayat, J.
(1) THESE appeals relate to a common judgment of the Andhra Pradesh High Court by which challenge to Notification issued by the State Government in G.O. Ms. No. 83, Transport, Roads and Buildings (Tr.II) Department dated 5.6.2000 was rejected. By the said Notification issued under clause (b) of Section 9(1) of the Andhra Pradesh Motor Vehicles Taxation Act, 1963 (in short the Taxation Act) an earlier order dated 1.7.1995 issued by the Transport, Roads and Buildings (Tr. 11) Department, was cancelled. The appellants who are operators of tourist buses originating from Karnataka State (their home State) and plying in adjacent States including the State of Andhra Pradesh filed the writ petitions assailing the legality and constitutional validity of the said Notification dated 5.6.2000.
(2) CASE of the appellants as canvassed before the High Court and reiterated in this Court is essentially as follows: Vehicles of the appellants are covered by the tourist vehicles permits issued by the State Transport Authority, Karnataka under Rule 64(1) of the Karnataka Motor Vehicles Rules and the authorization certificates issued by the some authority under the Motor Vehicles (All India Permit for Tourist and Transport Operators) Rules, 1993 (in short permit rules) and also the recognition certificates issued by the Director of Tourism, Bangalore under the said Rules. By virtue of these permits and certificates, tourist vehicles of the appellants are authorized to ply in certain contiguous States including the State of Andhra Pradesh. Central Government after discussions with the State Governments and with their consent formulated policies in the matter of concessions to be extended to tourist vehicles. A Notification dated 1.7.1995 was issued pursuant to a directive of the Central Government and its withdrawal is clearly unconstitutional. Rule 1(4) of the Permit Rules makes it clear that the conditions prescribed in Rules 82 to 85A of the Central Motor Vehicles Rules, 1989 (in short the Central Rules) do not apply to permits granted under the scheme governed by the Permit Rules. Therefore, in the garb of levying taxes on fares and freights, the directives of the Central Government are being violated and the same is impermissible. With reference to Articles 73, 256 and 257 of the Constitution of India 1950 (for short the Constitution), it is submitted that the directives of the Central Government are binding and the withdrawal Notification i.e. G.O.Ms. No. 83 dated 5/06/2000 is clearly illegal. With reference to Entry 35 of List III of the Seventh Schedule, it was submitted that the earlier Notification was in accord with the said entry. Section 88(9) of the Motor Vehicles Act, 1988 (in short the Act) throws considerable light on the controversy and similar is the position in respect of Section 88(14) of the Act. State Legislature has no competence to rescind or reverse the Notification conferring the benefits of concessional rate of tax to tourist operators. State law cannot go counter to the directives of Central Government on this subject. Therefore, the impugned Notification is beyond the legislative power which the State derives under Entry 57 of List II of the Seventh Schedule to the Constitution, in view of the express language used in Entry 35 of List III and also by virtue of the mandate contained in Article 254 of the Constitution. A plea of promissory estoppel was also pressed into service. It was submitted that the withdrawal of the concessional tax is an instance of arbitrary exercise of power which is not backed by any relevant consideration. Article 256 of the Constitution obligates the State to exercise its executive power to ensure compliance with the laws made by Parliament. Therefore, the impugned Notification could not have been withdrawn. In any event, after the withdrawal of the Notification there was a repeal of the relevant provision and without an operative Notification,
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
